We try to keep consumers up to speed on trends and changes in the solar industry, but solar markets vary so much by state (and sometimes even city) the information can be very broad. In this series of case studies, we’ll explore what going solar looks like in specific areas. Don’t see your state mentioned? Check back soon for new additions.
The Case for A Massachusetts Solar Energy System
Massachusetts is second only to Hawaii in high electricity rates - and those rates are rising (up 20 percent from 2017).1 Paying the highest bill isn’t a competition anyone wants to win, so no wonder many Bay Staters are turning to rooftop solar power. Plus, there’s a healthy selection of additional perks for homeowners who go solar in Massachusetts. Stay tuned to learn why it’s such a great choice for residents.
We’ll start by covering a solar purchase. That’s when you buy your system either outright or with a loan. Then we’ll cover solar loans and PPAs, which are slightly different.
Solar Incentives for the Bay State
Just like solar customers nationwide, Massachusetts residents who install rooftop solar energy systems are eligible for the federal Renewable Energy Tax Credit. This is equal to 30 percent of the cost of a PV solar system (through 2019 with decreasing credits through 2021). That’s a good-sized savings! Some solar providers will claim the credit (saving you paperwork both on the application and your IRS forms come tax time). That’ll pass the savings on to you. Others will leave it for you to claim.
In addition to the federal tax credit, Massachusettsans are eligible for a personal income tax credit. That credit is equal to 15 percent of the qualifying solar project costs or $1,000.2 And rooftop solar in Massachusetts is exempt from both sales tax3 and property tax!4
The perks don’t end there. The state’s solar rebate program has been exhausted but a few utilities still offer rebates to customers making the switch. These incentives can be worth between $2,000 and $6,000 so check with your local utility to see if you qualify.
Massachusetts also has a marketplace for Solar Renewable Energy Certificates (SRECs). Never heard of these? Get a quick primer from our Solar Incentives post. Essentially, renewable energy producers (you) get one SREC for every megawatt hour of electricity sent to the grid. Utility companies purchase SRECs to offset fines they incur when they don’t meet renewable energy requirements. You can sell your certificates in the SREC marketplace. A 5 kW solar system produces about 6 SRECs annually and recently the market value for each has been around $285 in Massachusetts.5 Not too shabby!
Net Metering in Massachusetts
Net metering for solar customers in Massachusetts is another financial benefit that makes solar desirable here. Essentially, this agreement allows you to send any electricity you don’t use to the grid for a credit from your utility. These credits offset the cost of buying power from the utility when you need it (after dark, for example). With a well-designed solar system, this can cut your electricity payment significantly - or even completely. A bill advancing through the state legislature would raise the cap on net metering, making it available to even more customers.6
Return on Your Massachusetts Solar Investment
Electric rates are high and there’s a good list of financial benefits to going solar, but your big question is probably, “How much money will I actually save?” Of course, the amount will vary based on the size of your system and your electricity use, but the average home in Massachusetts is projected to save about $23,000 over 20 years after purchasing a solar energy system.7
We’re guessing you have some ideas about how to use those savings. Plus, you really can’t put a price on knowing your electricity comes from a clean, renewable source and helps keep your city’s air clean!
Loans, Leases and PPAs
The calculations and projections above are based on owning your own solar system, but solar plans in Massachusetts come in other shapes and sizes too. We’ll take a look at each (for more details, visit our Solar Plans page):
- Solar Purchase - this is the most straightforward. You buy your solar system up front, plain and simple.
- Solar Loan - similar to a solar purchase but you finance your system with a loan. If you use a loan to purchase your system, the savings you see will vary a bit based on your particular loan terms. Some large solar installers offer solar loans. Other providers will refer you to a third-party financial institution for a loan. Some homeowners choose to take out a home equity loan to finance their panels. Exploring more than one loan option can help you get the best rate for your system.
- Solar Lease - you lease the panels while your solar provider maintains ownership.
- Solar Power Purchase Agreement (PPA) - you buy the power your panels produce and your solar provider maintains ownership of the panels.
Solar leases and PPAs are slightly different - you won’t own your panels or be eligible to claim the federal tax credit. The savings should still be passed to you though, as your solar provider can claim those incentives and factor them into your monthly payment. The solar provider will also claim SRECs from the system but the homeowner still qualifies for net metering.8 Lease and PPA customers typically aren’t required to make a down payment.
Savings can be easier to compare with leases or PPAs. Just take the monthly payment specified on your solar bid and compare it with your average, monthly electric bill. Keep in mind you’ll likely still have to pay a small monthly fee to your utility for grid connection and you may occasionally need to buy power from them.
More Energy Savings - EVs, Home Batteries and Utility Rates
There are even more ways to save with solar in Massachusetts. You can choose these products or programs when your solar system is installed or add them later to maximize your clean energy benefits.
- Take advantage of Massachusetts’ MOREV rebate program and make the switch to an Electric Vehicle. Learn more about saving money (and improving air quality) with your own solar EV charging station in this Q&A with a Clean Energy Trailblazer.
- Add a home battery to maximize flexibility of when to use the power generated by your solar panels.
- Look into your utility’s Time of Use rates to find out if you can save money by switching to an optional rate structure. The flexibility you get with solar panels - especially combined with a home battery - can make it easier to choose when to use power from the grid.
- Learn your utility’s policies. Utility rates for some solar customers in Massachusetts are in flux for the time being. Net metering customers of the utility company, Eversource, may be charged demand fees next year. A bill advancing through the state legislature would revoke those though. Home batteries can help offset demand charges by supplying extra power when needed without drawing from the grid.
Get the Figures for Your Home
No matter which options you choose, Massachusetts is a wicked awesome place to go solar. This post should give you an idea of how much you can save with solar, but the only way to know your specific savings is to get a solar bid tailored to your home and electricity use. Get started on your free quote.
7 Project Sunroof